It’s prime time in Minnesota and western Wisconsin for leaf peeping, apple picking and tromping in pumpkin patches. While many of us enjoy these seasonal favorites, the housing market follows the nature of trees in the fall — slowly changing and cooling from the heat of the summer and storing up energy for spring.
Some reports indicate a slowing in buyer demand, but according to the latest report out from the Minneapolis Area Association of REALTORS®, the reason is not tied to interest rates or waning demand, but rather a failure in the market to produce enough homes for sale to continue fueling sales.
- Median sales price: +7.3% — $246,900
- Average days on market: -12.3% — 50
- New listings: -5.2%
- Number of homes for sale: -16.7%
- Pending sales (signed purchase agreements): -1.7%
Economic check up
- Minneapolis-St. Paul area unemployment rate: 3.4% (4.4% nationally).
- Average 30-year mortgage rates have stayed near 4%.
- A strong local economy is encouraging for homeownership.
Breaking down the trends
Understanding real estate trends can be difficult. Market-wide figures don’t always reveal the whole story and segmented numbers are not always reported in the news. Let’s dig in to examine some overall trends we’ve been hearing about, and break them by down by price range*.
Overall new listings are down 5.2%
- Under $250,000: New listings fell 13.8% and inventory fell 30.5%.
- $250,000 – $500,000: New listings rose4% over last year and inventory fell by just 6%
While overall new listings are down, the mid-range bracket actually beefed up new listings and had a smaller
Overall pending sales are down 1.7%
- Under $250,000: Pending sales fell 11%
- $250,000 – $500,000: Pending sales went up 15%
Starter homes under $250,000 make up more than half of home sales in our area, so large movements in this bracket can sway the overall numbers. Pending sales in the mid-range bracket actually rose 15 percent.
Falling new listings and inventory are slowing sales in the starter home segment. Rising new listings in the mid-range bracket bolstered sales.
Finally, it’s critical to note that each locality has a different home buying and selling climate. A skilled REALTOR® can provide granular details about your neighborhood so you have the best information to guide your decisions.
New construction on the way
In September, building permits for single family homes increased 10 percent, according to the Builders Association of the Twin Cities. Building a home may be a good option for those feeling too much inventory pinch.
Buyers are looking for homes like yours. Get tips, checklists and insider secrets to selling your home with the Ultimate Guide to Selling Your Home.
*All data courtesy NorthstarMLS pulled on Oct. 16, 2017 for the 13-County Twin Cities metro area. Comparisons are year-over-year.